What is the residency status of Erin and her spouse after moving to Spain?

For Erin and her spouse, the correct answer regarding their residency status after moving to Spain is that they are nonresidents of California.

When individuals move out of California and establish a permanent residence in another country, like Spain, their residency status can change. In general, a nonresident is someone who does not have a permanent home in California and spends a significant amount of time outside the state. If Erin and her spouse have moved to Spain and plan to live there, they would typically be considered nonresidents of California for tax purposes, meaning they would not be subject to California income tax on income earned outside of the state.

Understanding this classification is crucial for tax compliance, as it affects which state taxes apply and avoids potential liabilities due to misunderstanding residency requirements. Permanent residency in another country does cover aspects of living there but does not imply they still retain California residency if they have established their primary home in Spain.

Residency status is a nuanced area of tax law, and recognizing the implications of moving and establishing residence elsewhere is vital for proper tax reporting and obligations.